BRYN MAWR, PA — Essential Utilities Inc. (NYSE: WTRG) announced that its regulated water subsidiary, Aqua Ohio recently signed an asset purchase agreement with Ohio’s Lawrence County Commissioners to purchase the Union Rome Sewer (URS) system which includes a wastewater collection network and treatment plant serving 5,300 connections in the southeast corner of the County for $25.5 million.
Aqua will play a key role in improving the system’s operations, which have been impacted by increasingly stringent regulatory requirements along with rising supply and material costs. In addition, Aqua’s business model enables the company to offer many of the benefits of larger organizations, such as staff engineers, a dedicated customer service team and customer assistance programs.
“Aqua has served customers in western Lawrence County with water service for decades, and we look forward to welcoming the Union Rome Sewer customers to our system,” said Essential Chairman and CEO Christopher Franklin, “We are uniquely positioned to improve the URS operations with our combined access to capital, technical expertise and economies of scale. We thank the Lawrence County Commissioners for their vote of confidence in our team and our ability to provide excellent service to their residents.”
Key elements of the agreement include:
- Aqua will pay Lawrence County $25.5 million for the assets which will be used to retire debt relating to the system and other purposes,
- Aqua will invest an estimated $12.7 million in the wastewater system over the next five years to meet regulatory and environmental demands,
- All URS employees will be offered employment at Aqua after passing customary background and drug screenings.
Closing of the sale is anticipated during the summer of 2023 upon approval by the Public Utilities Commission of Ohio (PUCO).
“I commend the Lawrence County Commissioners for reaching an agreement that addresses the multiple needs of the system and the customers,” said Aqua Ohio President Robert Davis. “The proceeds paid by Aqua will allow the debt associated with the system to be repaid, and Aqua will make the necessary investments to ensure reliability and regulatory compliance. With Aqua, required customer rate increases can be more gradual than if the county maintained ownership.”
“Operating a wastewater system is a lot more complicated than it was even a few years ago. Technology, regulatory requirements and environmental standards are continually evolving,” said County Commissioner DeAnna Holiday. “It is more and more difficult for small communities to operate sewer systems. That’s why selling the system to Aqua makes sense.”
“In the long run, I believe customers will receive more reliable service, the system will be better maintained and rates will be more predictable than if we tried to continue ownership as a government-run operation,” President of the Board of Commissioners Dr. Colton Copely added.
Affected customers will be notified of the purchase and details about the transition once the agreement is approved by the PUCO.
Union Rome Sewer is the third asset purchase agreement executed by Essential’s Aqua companies in 2022. Including Union Rome Sewer, the company has seven signed asset purchase agreements for water and wastewater systems, which collectively have a total purchase price of approximately $377 million and represent more than 218,000 equivalent retail customers or equivalent dwelling units. Additionally, the company closed three water and wastewater acquisitions in 2022, representing an addition of nearly $120 million in rate base and approximately 23,000 equivalent retail customers or equivalent dwelling units.
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